In the year through Q2 2023, over-the-year real wage growth finally returned to the pre-pandemic pace of about 1.7%, according to data released today by the U.S. Bureau of Labor Statistics. Wages still have considerable ground to make up, following two quarters of sub-trend growth, and six straight quarters of real wage declines before that.
While many workers received large nominal wage increases following the pandemic, they generally weren’t large enough to offset skyrocketing inflation. Now that inflation has eased considerably, inflation-adjusted earnings are finally growing again.
Another takeaway from the latest report on Usual Weekly Earnings is that the U.S. gender pay gap reached its narrowest point in Q2 of 2023. The pay gap narrowed rapidly in the 1980s and 1990s, but became more stubborn in the 2000s. The pace at which earnings are converging remains gradual, but the Q2 milestone suggests that progress hasn’t entirely stalled.